We imagine that there is a “true” line denoted by y=β0+β1xy=β0+β1x (shown as the dashed green line in Figure 4.2, but we do not know β0β0 and β1β1 so we cannot use this line for forecasting. Therefore we obtain estimates β^0β^0 and β^1β^1 from the observed data to give the “regression line” (the solid purple line in Figure 4.2).
The regression line is used for forecasting. For each value of xx, we can forecast a corresponding value of yy using y^=β^0+β^1xy^=β^0+β^1x.